wo divisions: Northern and Southern. Individual stores are placed in one or the other divis demographic changes in the Northern Division area have led to declining foot traffic and s executives have been asking whether the chain should close those stores and focus on th ecent income statement for the Northern Division follows. Lessing Toy and Hobby Northern Division For the Year Ending January 31 ($000) Sales revenue Costs Cost of goods sold Advertising Administrative salaries Sales commissions Rent and occupancy expense Allocated corporate support Total costs Net loss before tax benefit Tax benefit at 25% Net loss. $ 12,540 $ 6,520 495 815 1,629 2,063 1,335 $ 12,857 $ (317) (79.25) $ (237.75) The CEO has asked for your thoughts on the decision to close the Northern Division stores. he stores closed, neither total corporate support costs nor operations or costs of the South change. Required: a. Using the worksheet below, determine which revenues and costs are probably differentia close the Northern Division stores. 5. What will be the effect on LTH's income if the Northern Division stores are closed?

wo divisions: Northern and Southern. Individual stores are placed in one or the other divis demographic changes in the Northern Division area have led to declining foot traffic and s executives have been asking whether the chain should close those stores and focus on th ecent income statement for the Northern Division follows. Lessing Toy and Hobby Northern Division For the Year Ending January 31 ($000) Sales revenue Costs Cost of goods sold Advertising Administrative salaries Sales commissions Rent and occupancy expense Allocated corporate support Total costs Net loss before tax benefit Tax benefit at 25% Net loss. $ 12,540 $ 6,520 495 815 1,629 2,063 1,335 $ 12,857 $ (317) (79.25) $ (237.75) The CEO has asked for your thoughts on the decision to close the Northern Division stores. he stores closed, neither total corporate support costs nor operations or costs of the South change. Required: a. Using the worksheet below, determine which revenues and costs are probably differentia close the Northern Division stores. 5. What will be the effect on LTH's income if the Northern Division stores are closed?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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